Biden Administration Officially Launches Application for New Income-Driven Repayment Plan
By Maria Carrasco, NASFAA Staff Reporter
The Biden administration on Tuesday officially launched the application for the Saving on A Valuable Education (SAVE) repayment plan, a new income-driven repayment (IDR) plan that the administration said will “make college more affordable and support students and borrowers.”
Earlier in July, the administration launched the beta SAVE application, where borrowers were able to test the website and apply for the repayment plan. Borrowers who applied during the beta launch will not be required to resubmit an application and, according to the administration, should have received an email confirmation if they successfully applied.
The Department of Education (ED) announced its final rule on the SAVE plan in July, which rebranded the existing REPAYE plan to SAVE. While the SAVE plan fully goes into effect on July 1, 2024, parts of it are being implemented early, including increasing the income exemption from 150% to 225% of the federal poverty line and preventing monthly interest not covered under the plan from being charged, among other things. Education Secretary Miguel Cardona said in a statement on Tuesday that the SAVE plan is “the most affordable repayment plan in history.”
"The SAVE plan is another huge step forward in President Biden's tireless efforts to fix the broken student loan system,” Cardona said in a statement. “SAVE isn't just about helping borrowers today, it's about creating a more affordable pathway for millions of aspiring students who dream of earning college degrees and achieving the American dream—that's exactly what the Biden-Harris Administration has fought to do since day one."
ED on Tuesday also announced it would start a nationwide outreach campaign called "SAVE on Student Debt'' in collaboration Civic Nation, the National Association for the Advancement of Colored People (NAACP), the National Urban League, Rise, the Student Debt Crisis Center, UnidosUS, and Young Invincibles. ED said the campaign will “leverage strategic partnerships across public, private, and nonprofit sectors,” to ensure borrowers take full advantage of the benefits provided by the SAVE plan and other student loan debt relief initiatives.
With these organizations, ED will hold a “SAVE on Student Debt Week of Action” in September with several actions to reach borrowers. Additionally, ED said that it, along with student loan servicers, will reach out to borrowers to invite them to apply for the SAVE plan.
NASFAA has been in contact with ED about the upcoming outreach campaign and will participate in the department’s week of action activities. As more information becomes available NASFAA will disburse those updates through Today’s News and social media updates.
As millions of borrowers head to repayment, with interest beginning to accrue in September and payments due in October, ED said most borrowers who apply for the SAVE plan in the coming days can expect to have their new monthly payment amount for their first payment in October. Borrowers can check the status of their application by visiting their account dashboard on StudentAid.gov.
According to ED, borrowers who are already enrolled in the REPAYE plan will automatically have their monthly payments adjusted to the new SAVE plan before payments restart.
The launch of the SAVE plan application comes as Republicans gear up to challenge the new IDR plan. Politico reports that Sen. Bill Cassidy (R-La.), ranking member of the Senate Committee on Health, Education, Labor, and Pensions (HELP), and Rep. Virginia Foxx (R-N.C.), chair of the House Committee on Education and the Workforce, plan to introduce companion Congressional Review Act (CRA) resolutions that would seek to repeal the SAVE plan when Congress returns in September.
Publication Date: 8/23/2023
Mary J | 8/24/2023 11:48:35 AM
Is this available to borrowers who are currently in the Public Service Loan Forgiveness program?
Eric A | 8/23/2023 9:11:55 AM
Is there any benefit to a current student applying for this SAVE plan, or should they wait until they graduate to apply?
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